The permits are the latest twist in a long-running saga. Shell spent $2.1 billion in 2008 to purchase leases from the Interior Department to explore for oil in the Chukchi Sea and it has spent about $5 billion more since then. But it has been mired in lawsuits and a regulatory process complicated by a series of mishaps that have damaged vessels required for the drilling program.
The most recent mishap sidelined the Fennica, one of two icebreakers in Shell’s Arctic fleet and the only one carrying equipment designed to fit over a damaged well in case of a blowout. Shell must have the equipment nearby before it can penetrate areas suspected of holding oil or natural gas.
On July 3 on its way to the drill site, the Fennica scraped into a shallow shoal and tore a 39-inch by 2-inch gash in its hull. The Coast Guard is investigating, but some areas along the ship’s route could be shallower than shown in surveys conducted decades ago.
“We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base,” Shell spokesman Kelly op de Weegh said.
But Lois Epstein, an engineer and Arctic program director for The Wilderness Society, said of the administration’s announcement Wednesday: “This is a tremendously disappointing decision that poses a serious, long-term threat to the fragile environment of the Arctic Ocean.” She added, “there are two things certain about offshore drilling in the Arctic: things will go wrong, and the oil industry isn’t ready.
Since the massive BP oil spill in the Gulf of Mexico in 2010, environmental groups have urged President Obama to block Shell’s plans, especially given the remoteness of the Chukchi Sea from Coast Guard and other vessels.
League of Conservation Voters president Gene Karpinski said in a statement that any Arctic Ocean drilling ”is incompatible with President Obama’s strong record on and desire to address climate change.”
Speaking to reporters during a Camp David press conference in May, Obama emphasized that when it came to Arctic drilling, “nobody is more mindful of the risks involved and the dangers” given his experience with the Gulf of Mexico spill. He added that Shell had to “revamp its approach” based on stricter federal standards his officials authored.
In 2013, the Interior Department reviewed Shell’s abbreviated 2012 drilling program. Shell struggled to obtain certification of its containment vessel, the Arctic Challenger; the Arctic Challenger had trouble deploying its containment dome; and one of Shell’s two drilling rigs, the Kulluk, ran aground off Kodiak Island in December on its way to a warm water port.
Interior ordered a third party audit of Shells’ management culture and systems, but the department has turned down freedom of information requests filed by environmental groups seeking copies of the audit, Epstein said.
The Fennica will arrive soon for repairs in Portland. Shell said the ship should reach the Chukchi Sea before drilling penetrates formations the company hopes contain large oil reserves.
In 2012, Shell drilled in an oil prospect called Burger A, but the time it took Shell to meet permitting standards and an unusually icy summer meant it did not time to drill deep enough to enter oil or gas zones, so Shell plugged and secured the wells.
This summer, the company said it intends hopes to explore in other areas—known as Burgers J and V—based on “an improved and clear picture of the subsurface structure.”
But Epstein said that the wells cannot be drilled at the same time because the Fish and Wildlife Service has barred companies from drilling simultaneously less than 15 miles apart because the noise from drilling could harm walrus populations that often in the area. Shell’s wells are only nine miles apart.
Juliet Eilperin contributed to this report.